Gm Needs Money What Are The Real Effects

[ray23]

Sad, we are all in the boat.

[LaoPo]

FED help or Bankruptcy ?

http://www.marketwatch.com/newscommentary/...ies/automobiles

LaoPo

[Lost in LOS]

we have to bail them out, no choice. It is not the car industry that we only need to save but millions of related jobs. No car companies, no parts companies, and the list goes on and on. If we no longer have car companies other countries will have us at their mercy. I would not give a dime of taxpayer money to any company that retains a union. start over since they will never be able to survive with the archaic union rules. We simply cannot compete with our hands tied. Workers, take the offer or be out of work, up to you. Pay what the particular job is worth, pay increase based on performance not time, pay reasonable benefits, have the ability to fire incompetent workers, have the ability to promote only those that are the best at their job and not promote because of time served. Without fixing the job structure you might as well let them go bankrupt and start over.

this will never happen because the criminals that run the unions have too much power in the government. America is doomed if we don't stop this union mess and stop with the political correctness.

My companies in America were controlled by government and run by me. No unions but endless regulations. Construction company and restaurants. I could not fire a non performing employee without lots of grief. If they lied and said they were hurt on the job I could not fight it, the insurance companies just paid and raised my insurance. The minimum wage was raised even though my waiters made 200 a day in tip cash. when you raise the minimum wage a dollar and hour it cost me 3 since everything is based on the gross wage. I paid 60% of the hourly wage in my construction company without having a claim in 30 years, my liability insurance doubled every year in the last 3 years with no claims etc and I had to compete against an unlicensed, uninsured, illegal, Mexican crew who worked with impunity because if anyone complained they were "racists'. I would get a new "fee or license needed" every couple of weeks in my restaurant so the government could did into my money. the last one and final straw in my restaurant was i was required to get an expensive "fish and game license" because I served fresh fish. I could only buy my fresh fish from a government licensed seller even though they had the fish and game license.

I finally closed my successful construction and restaurants after being fed up with the taxes, insurances, fees, regulations etc. Unfortunately about a hundred people lost their jobs but it was just too hard to make money with a monkey on my back. I brought, repaired and sold houses my last couple of years, no government regulations, just taxes which allowed me to retire.

sorry for the rant but America is going down the tubes unless they fix the system and Obama seems sharp but wants to share the wealth which will put us in the tank

[henryalleman]

we have to bail them out, no choice. It is not the car industry that we only need to save but millions of related jobs. No car companies, no parts companies, and the list goes on and on. If we no longer have car companies other countries will have us at their mercy. I would not give a dime of taxpayer money to any company that retains a union. start over since they will never be able to survive with the archaic union rules. We simply cannot compete with our hands tied. Workers, take the offer or be out of work, up to you. Pay what the particular job is worth, pay increase based on performance not time, pay reasonable benefits, have the ability to fire incompetent workers, have the ability to promote only those that are the best at their job and not promote because of time served. Without fixing the job structure you might as well let them go bankrupt and start over.

this will never happen because the criminals that run the unions have too much power in the government. America is doomed if we don't stop this union mess and stop with the political correctness.

My companies in America were controlled by government and run by me. No unions but endless regulations. Construction company and restaurants. I could not fire a non performing employee without lots of grief. If they lied and said they were hurt on the job I could not fight it, the insurance companies just paid and raised my insurance. The minimum wage was raised even though my waiters made 200 a day in tip cash. when you raise the minimum wage a dollar and hour it cost me 3 since everything is based on the gross wage. I paid 60% of the hourly wage in my construction company without having a claim in 30 years, my liability insurance doubled every year in the last 3 years with no claims etc and I had to compete against an unlicensed, uninsured, illegal, Mexican crew who worked with impunity because if anyone complained they were "racists'. I would get a new "fee or license needed" every couple of weeks in my restaurant so the government could did into my money. the last one and final straw in my restaurant was i was required to get an expensive "fish and game license" because I served fresh fish. I could only buy my fresh fish from a government licensed seller even though they had the fish and game license.

I finally closed my successful construction and restaurants after being fed up with the taxes, insurances, fees, regulations etc. Unfortunately about a hundred people lost their jobs but it was just too hard to make money with a monkey on my back. I brought, repaired and sold houses my last couple of years, no government regulations, just taxes which allowed me to retire.

sorry for the rant but America is going down the tubes unless they fix the system and Obama seems sharp but wants to share the wealth which will put us in the tank

I don't know how the Unions in the US operates, but in Europe the Unions are not regarded a

[henryalleman]

I don't know how the Unions in the US operate but in Europe the Unions are not regarded as the enemy by the companies, but rather as a partner, for their mutual benefits. A small example; the GM plant in Antwerp had to reduce their costs with 50 million Euro, and ask the Unions to participate in finding a solution. Well in 3 days the 50 million was find, without any social conflict.

I will not go on much further on this subject because this isn't the meaning of TV forum, but I only like to emphasize that its not the Unions fault that GM and other US car producers are in the present deplorable situation.

Furthermore I would like to notice that it is GM Detroit who is in financial problems, The economical situation of GM Europe or FORD Köln for the matter is less problematic( and they have very strong Unions, even EU organized). The successful VW company has even the Union Deutsche Metal as a shareholder, and they have one of the highest salaries, redundancy premiums and social protection benefits in Europe.

So blaming the Downfall of US car producers and other industries as an Unions fault is a bridge too far.

[ray23]

Ok the real story here Unions tradtionally vote Democrat adn dont fund Republican canidates. Remember Thailand is the only place that has troublesome politics.

Pelosi is right they automakers need to retool and make the cars they already know how o make an fill todays needs.

Unions sorry but if there is no plant there is nothing to strike agianst. They better rethink their position and wait to fight for day they can win.

A lesson can be learned from Harley Davidson they made a huge recovery for one reason everbody pulled together. In the end they go a lot more then letting it fall apart.

I don't think should fund any of this without producing energy effecient cars. The manufactors adn the employees work together for a better day. or close the plants and the chips fall where they may. It' time for hard ball not pussy footing around loan or no loan.

Me I woudl clsoe the plant right now wait for Obama aftre few months of no work, might be easier to get these guys to pull their heads of their bunns and work together.

Congress gives this away now it's going to be business a usual, which didn't work.

For a short period of time in Life i woked fro Kaiser Steel in Fintana California. Union and short of killing someone they coudl nto fire yiou, onb nce yuo ated teh sixty provbabion. I saw heart runied and tr hrown away just caue a guy was pissed at the sueprvisor. Now boy takl about job prtection or was it. That mill closed years ago, coudln make a profit. The only group that wawa interested in producing wa the one running the furnaces and making the steel why. They were on salary and incentive.

It can be done but all aprts haev to look at profits.

Speaker Pelosi Says Automakers Need to Restructure (Update3)

By Vincent Del Giudice and Bill Koenig

Nov. 15 (Bloomberg) -- House Speaker Nancy Pelosi said U.S. automobile manufacturers need to restructure ``to ensure their long-term economic viability,'' and the head of the United Auto Workers said the government must provide aid before President- elect Barack Obama takes office on Jan. 20.

Ron Gettelfinger, president of the UAW, said government assistance would be a ``loan, not a bailout'' to shore up General Motors Corp., Ford Motor Co. and Chrysler LLC.

Pelosi said the Democrats' plan ``will provide immediate, targeted assistance to allow the carmakers, together with affected unions, time to develop a plan to assure the long-term viability of the industry.''

Under legislation being drafted by Democrats, automakers would receive $25 billion in loans out of a $700 billion financial-rescue package approved earlier this year. President George W. Bush's administration opposes using the plan's funds for carmakers, and top Republican legislators have also voiced opposition.

A GM collapse alone would cost the government as much as $200 billion for costs associated with unemployment insurance and other programs after millions of auto-related job losses, according to a forecast from IHS Global Insight Inc. in Lexington, Massachusetts.

Conflicting Polls

A survey by Peter D. Hart Research Associates that was commissioned by GM found that 55 percent of Americans support government loans for the auto industry. Thirty percent of those surveyed Nov. 11-12 opposed loans. The poll of 804 adults had a margin of error of 3.5 percentage points.

In contrast, a USA Today/Gallup poll taken Nov. 7-9 found 47 percent of 1,010 adults surveyed said providing loans or other assistance to automakers was ``not very important.''

Separately, GM is briefing congressional leaders, officials of the Bush administration and Obama's transition team this weekend on the broader effects of a bankruptcy by the automaker, the Wall Street Journal reported.

``We're on a cliff here,'' Gettelfinger told reporters on a conference call today. ``We need to get this bridge loan and we need it in this lame-duck session'' of the Congress, he said.

``Would you buy a car from a bankrupt automaker? We don't see bankruptcy as a viable option,'' the union president said, adding that assistance is needed ``before Senator Obama takes office.''

Pelosi said today that ``the Democratic plan includes even stronger limits on executive compensation and assurances to protect the taxpayer.'' The industry restructuring must ``meet standards for fuel efficiency that ensure the competitiveness of U.S. autos,'' the statement said.

Energy Department Loan

The ``appropriate source of funding for this short-term assistance'' is the financial-rescue bill already authorized by Congress, Pelosi said. ``Any effort to divert funds from'' an earlier-approved $25 billion in Energy Department loans designed to promote fuel efficiency ``is a step backward in assuring the viability and competitiveness of the U.S. auto industry,'' Pelosi's statement said.

White House spokeswoman Dana Perino issued a statement to reporters repeating the Bush administration's opposition to the use of the financial-rescue package to aid the auto industry. The money ``should be used for its intended purpose, stabilizing and strengthening our financial system,'' Perino said.

The Bush administration is ``actively calling on Congress'' to pass legislation that would accelerate getting loans to the automakers without using money from the financial-markets rescue plan, Perino said yesterday.

Fuel Efficiency

Bush wants Congress to amend existing laws providing $25 billion in Energy Department loans to automakers to ``help accelerate much needed funds'' to companies that show ``long- term viability'' and a ``willingness to make tough decisions,'' Perino said. Those loans were originally intended to help automakers develop more fuel-efficient vehicles.

GM, Ford and Chrysler are using up cash as U.S. auto sales have fallen 15 percent this year through October. Detroit-based GM said last week that it may run short of funds before the end of this year, and Auburn Hills, Michigan-based Chrysler said Nov. 13 that survival would be difficult without aid.

Ford, based in Dearborn, Michigan, burned through $7.7 billion of cash reserves during the third quarter. Chief Executive Officer Alan Mulally said Nov. 7 that Ford has ``sufficient liquidity.''

``We are here because of what is going on in the economy,'' Gettelfinger said. The credit crunch and low consumer confidence are hurting auto sales, he said.

The union leader also said the UAW would resist further givebacks by members. The union agreed in 2007 contracts with the automakers to cut wages and end fixed pensions for new hires. Starting in 2010, GM, Ford and Chrysler are scheduled to shed retiree health-care obligations for U.S. factory workers to a union-managed trust.

``We have made dramatic, dramatic changes,'' Gettelfinger said.

To contact the reporter on this story: Vincent Del Giudice in Washington at [email protected].

Last Updated: November 15, 2008 19:54 EST

[brahmburgers]

If Sam opens a shoelace company, and his shoelaces are not appealing to buyers, then potential customers will go and buy shoelaces from Akiro down the street – who makes the type of shoelaces buyers want.

Compare that with U.S. auto makers and some auto makers in other countries. The ‘Big Three’ U.S. automakers have consistently produced products that are either inferior quality or simply not what potential customers want. They also consistently pay all their expenses and overhead with credit. Those two trends; inferior products and chronic credit spending is why the Big Three are currently in Big Trouble.

Republicans in particular, often espouse the importance of having ‘open markets’ – untethered by controls. Yet, when the Bush Administration advocates bail-outs for giant corporations, many of his fellow Republicans go right along with Democrats and give blanket approval. Every politician who approved the 700 billion bail-out for Wall Street, and the untold hundreds of billions of additional bail-outs for the Big Three and other failing corporations – is essentially saying, “ok, they’re failed businesspeople, but they’re so big, we have to shovel billions of dollars in their laps in order to try and save them.” Granted the repercussions of allowing failed businesses to fail will have widespread harm on the ‘little people’ who are entwined with those businesses – yet what will keep bosses from continuing to make mistakes - if they know there are no real consequences for failed business decisions.

If they’re failures, their salaries should reflect that, and their failures might enable smarter business people to take over their former niche in the market.

If the feds, using taxpayer funds, are going to bail out Wall Street and the Big Three and other failing corporations, the least they can do is to put a cap on salaries at those business. They can mandate that every person working there, from the CEO on down, gets an annual salary cap of $65,000. That cap does not allow for any stock options, any golden parachutes, or any percs of any kind. The message with that policy would be, “your company would have failed without taxpayer intervention. We’ll arrange for an infusion of emergency funding to keep your business afloat, but we won’t reward your failed biz decisions by enabling you to continue to get filthy rich.

There has also been talk of the U.S. government taking a stake in the companies they bail out. If the Feds did so, they would essentially have reps sitting in on or controlling board room meetings – and making important business decisions for those companies. Maybe that’s not a bad thing, especially considering the many wrong decisions that have been made by corporate board members in the past few years – yet who’s to say government decision makers are any wiser than corporate decision makers.

People are people - they’re all mortal and all have frailties, flaws and loads of greed. Indeed lust to amass money is the #1 reason of the financial collapse of 2008. Not just greed that’s endemic throughout corporate personnel, but greed of consumers – which is just about every one of us. The greed of consumers is the elephant in the kitchen that few have the guts to mention. Certainly not the political candidates for office, as none of them would want to offend the people who might vote.

Perhaps robots should run corporations – and those robots can be programmed to not be riven by lust for wealth. Instead, the CEO robots would be programmed to make the wisest decisions for corporate growth and responsibility. They may make mistakes, but the certainly couldn’t do any worse than what corporate heads have been doing in the lead-up to financial melt-down of 2008.

Brahms

[VegasVic]

I don't know how the Unions in the US operate but in Europe the Unions are not regarded as the enemy by the companies, but rather as a partner, for their mutual benefits. A small example; the GM plant in Antwerp had to reduce their costs with 50 million Euro, and ask the Unions to participate in finding a solution. Well in 3 days the 50 million was find, without any social conflict.

I will not go on much further on this subject because this isn't the meaning of TV forum, but I only like to emphasize that its not the Unions fault that GM and other US car producers are in the present deplorable situation.

Furthermore I would like to notice that it is GM Detroit who is in financial problems, The economical situation of GM Europe or FORD Köln for the matter is less problematic( and they have very strong Unions, even EU organized). The successful VW company has even the Union Deutsche Metal as a shareholder, and they have one of the highest salaries, redundancy premiums and social protection benefits in Europe.

So blaming the Downfall of US car producers and other industries as an Unions fault is a bridge too far.

No, its not really a bridge too far, but there is plenty of blame to go around! There were plenty of greedy and lazy automotive executives over the past 30-40 years, but it is substantially a problem with arrogance in not changing the product mix quickly enough and of course the out of control union wages, and more importantly retirement and health care benefits (legacy costs) What should happen is that the big 3 should go into chapter 11 reorganization, where sadly the common shareholders will get screwed but also the union retirement benefits can be changed and the healthcare laidoff on the government (this is what Obama wants, so he will get it). The U.S. government will likely do a bailout, with conditions on union pay and benefits as well as ececutive pay and overall compensation. There will also be an increased CAFE standard and a massive retooling effort towards CNG, and hydrogen fuel cell-multifuel vehicles. The changes will take place a warp speed, because quite frankly they have to! On the other hand the Big 3 could just go chapter 7 and dissappear all together and the worldwide recession would then become a worldwide depression Stay tuned in, its just starting to get interesting!

[Pakboong]

Insurance coverage for GM and Ford suppliers in Europe has been withdrawn. Things will unfold much more quickly as this new wrinkle takes effect.

http://www.ft.com/cms/s/0/e48742c0-b1c3-11...00779fd18c.html

[VegasVic]

For anyone who doesn't think this is Thai related remember Chevrolet has assembly plant here.

CNN had an interview this morning with a part of Obama's economic team. One of those was the Governor of Michigan. Most of the assmbply plants have been located there for years in Detriot. She talked about the loss of 400K jobs.

I think that is huge understatement, maybe in the assembly plants. But think about what goes into cars. All the nuts, bolts, tires, wheels, wires, connectors, glass, plastic. Those are all produced from Raw mateials not at the assempbly plants but other company's and manufactors a very far reaching list of entities. 400K in job losses is no where near, what the real loss will be. That will hit Thailand hard.

I really don't see that the banks are losing up the purse strings yet, matter of fact read that the Brits a had a little chat with their banks about passing on the savings to the consumer. Seems well over due in the states to me. The American banks seem to be working on the something for nothing theory still.

This is in the real world now, me I don't agree with the government bailing these entities out, not because I don't recognize the importance. But wasn't the idea in bailing out the banks to get them to loan?

Me I think it's time to grab these bankers by the collar drag them into an office and flat tell them. Loan and do it at fair rates. Or your on your own. We will fund banks that loan to help the real economy.

This something for nothing junk is what got us in trouble in the first place.

I do believe that is my second rant this week, time for a chill pill

General Motors Says It May Run Out of Operating Cash This Year

By Jeff Green and Mike Ramsey

Nov. 8 (Bloomberg) -- General Motors Corp., seeking U.S. aid to avoid collapse, said it may not have enough cash to keep operating this year and will be ``significantly short'' by the end of June unless the auto market improves or it adds capital.

Available cash fell to $16.2 billion on Sept. 30 from $21 billion at the end of June, the largest U.S. automaker said yesterday as it reported a $4.2 billion third-quarter operating loss. Merger talks with Chrysler LLC were suspended.

``Things are clearly deteriorating more quickly than people expected,'' said Jill Fields, who manages $2 billion in high- yield debt as managing director at Babson Capital Management LLC in Springfield, Massachusetts. ``They're either going to need aid or they're at risk for filing'' for bankruptcy.

GM's outlook and Ford Motor Co.'s $7.7 billion cash burn added urgency to automakers' pleas for government help after a quarter in which U.S. industrywide sales plunged 18 percent. The companies are asking for $50 billion in new loans, a person familiar with the plan said.

Chief Executive Officer Rick Wagoner, Ford's Alan Mulally and Chrysler's Robert Nardelli renewed the push for assistance in meetings with U.S. House and Senate leaders in Washington on Nov. 6. Wagoner said GM also has been in contact with the staff of President-elect Barack Obama.

``We have sufficient liquidity to continue on plan,'' Mulally, 63, said in an interview with Bloomberg Television. Dearborn, Michigan-based Ford reported an operating loss of $2.98 billion.

Ford rose 4 cents to $2.02 in New York Stock Exchange composite trading, paring the shares' decline this year to 70 percent. Detroit-based GM fell 44 cents, or 9.2 percent, to $4.36. The stock has tumbled 82 percent this year.

$73 Billion in Losses

Yesterday's cash forecast was the bleakest yet from GM, which has lost almost $73 billion since the end of 2004. Using $6.9 billion in cash last quarter pushed GM closer to the $11 billion minimum it says is needed to pay bills.

A bankruptcy filing ``would be a disaster far beyond General Motors and a sad chapter in American history,'' Wagoner, 55, said in a Bloomberg Television interview. GM said on Oct. 24 that bankruptcy ``is not an option.''

Should GM take such a step, the result would be 2.5 million jobs lost in the first year among automakers, suppliers and related businesses, according to a Nov. 4 report by the Center for Automotive Research, based in Ann Arbor, Michigan.

Bailout Optimism

A U.S. rescue package for GM, Ford and Chrysler is likely before President George W. Bush leaves office in January, said Dennis Virag, president of Automotive Consulting Group in Ann Arbor.

``Either the federal government provides money for a bailout and lets the industry retool, restructure, and move ahead, or the industry dies,'' Virag told Bloomberg Television.

Babson Capital's Fields said GM and Ford bonds already are trading at ``bankruptcy levels,'' so the automakers are relying on ``a political decision'' to avert that fate. She wouldn't say whether the holdings she manages include GM or Ford debt.

GM's 8.375 percent bond due in July 2033 fell 4.3 cents to 24 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The debt yields 34.83 percent.

Ford's 7.45 percent note due in July 2031 dropped 3.5 cents to 34 cents on the dollar, yielding 22 percent.

Chrysler Talks

While GM didn't specify any prospective partners in saying merger discussions were being halted, the biggest U.S. automaker had been in negotiations on a tie-up with Auburn Hills, Michigan-based Chrysler, people familiar with the plans said.

Consideration of a strategic acquisition was ``set aside'' to focus on ``immediate liquidity challenges,'' GM said.

GM's per-share operating loss was wider than the average estimate on an adjusted basis of $3.94, based on 10 analysts surveyed by Bloomberg.

Including a non-cash, $4.9 billion one-time gain related to unloading retiree medical bills, GM had a net loss of $2.5 billion, compared with a $38.9 billion year-earlier loss on a tax-accounting charge. GM's auto sales in the U.S., its largest market, fell 21 percent.

GM's cash use in the fourth quarter should be closer to the levels in this year's first and second quarters, when it was about $3.6 billion, Chief Financial Officer Ray Young said on a conference call.

GM said it is trying to boost cash by $20 billion by the end of next year, an increase from a July 15 plan for $15 billion.

Asset sales, a part of the strategy, have been hampered because potential buyers can't get financing, Chief Operating Officer Fritz Henderson said. GM's Hummer brand of sport-utility vehicles is among the businesses on the block.

Ford's Loss

Ford also said it was accelerating savings programs including a 10 percent reduction in salaried-job costs, expanding on a 15 percent slash this year; deeper cuts in production; and a smaller capital-spending budget.

The per-share operating loss of $1.31 was wider than the 93-cent average of 10 analyst estimates compiled by Bloomberg. Revenue plunged 22 percent to $32.1 billion.

The loss for Ford excluded a gain for shedding future retiree medical bills under a new union contract. Including the gain, Ford had a net loss of $129 million, or 6 cents. The net loss a year earlier was $380 million, or 19 cents.

Ford's U.S. auto sales tumbled 25 percent in the quarter.

To contact the reporters on this story: Jeff Green in Detroit at [email protected]; Mike Ramsey in Detroit at [email protected].

Last Updated: November 8, 2008 00:01 EST

IMHO its no use that the US government bail out GM, FORD or CHRYSLER. Simply because they produce cars of the past. Just look how many home-made US produced cars are sold outside the US. US produced Pick Ups and sedans are just slurping to much benzine. The Japanese and Europeans car producers make economical and much better cars. They produce 1,2 and 1,6 turbo diesels who consume 5 liter per 100 km and have an high performance with very low emissions, and almost maintenance free, only every 30 or even 50K. Also in the Pick Up and SUV market you see hardly an home made US vehicle outside the US.

In short there is no export market anymore for US produced cars, and in the home market they can not compete with Japanese and European produced cars. Is it not so that the profits from the 3 sisters come only from their plants outside the US.

To change this will take a lot of time and capital, and that they just don't have both of that anymore.

A few years ago FIAT and RENAULT where planing to make an partnership with GM but after seeing the financial situation they stopped their plans. 6 months ago the Italian investment bank UNICREDIT give a warning that in next 5 years at least one of the 3 sisters if not all will go bankrupt.

I'm afraid they go the same way as US producers of consumer electronics, there is not even one mayor US company who produce TV sets anymore.

There hasn't been a TV manufactured in the U.S. for many years, but its not because the U.S. manufacturers did not make good TV sets, its because those manufacturers figured out that they could make those TV sets a lot cheaper in Mexico and elsewhere around the globe The European and Japanese make more economical cars because the cost of fuel in Europe and Japan is 2-3 times higher than in the U.S. as far as maintainence free, there are no cars made that are maintainence free my friend, but the Japanese are much closer to this than European cars. I have many friends that curse daily at their BMW's and Jags, so much for maintainence free!!! Then again there was that outstanding "maintainence free" European export a few years back that took the world by storm THE YUGO

[midas]

There hasn't been a TV manufactured in the U.S. for many years, but its not because the U.S. manufacturers did not make good TV sets, its because those manufacturers figured out that they could make those TV sets a lot cheaper in Mexico and elsewhere around the globe The European and Japanese make more economical cars because the cost of fuel in Europe and Japan is 2-3 times higher than in the U.S. as far as maintainence free, there are no cars made that are maintainence free my friend, but the Japanese are much closer to this than European cars. I have many friends that curse daily at their BMW's and Jags, so much for maintainence free!!! Then again there was that outstanding "maintainence free" European export a few years back that took the world by storm THE YUGO

But that has been the problem in America Vegas Vic

Americans spent money on depreciating consumer goods as if there was no tomorrow

and they used oil resources like there was no tomorrow...........................

it's this failure to be aware of ttrends in the rest of the world that was prevalent

in the U.S. for so long that also lost your innovation skills for things like

TV design and manufacture - not only lower labour costs

[ace]

...................

it's this failure to be aware of ttrends in the rest of the world that was prevalent

in the U.S. for so long that also lost your innovation skills for things like

TV design and manufacture - not only lower labour costs

I think Microsoft did OK.

[VegasVic]

There hasn't been a TV manufactured in the U.S. for many years, but its not because the U.S. manufacturers did not make good TV sets, its because those manufacturers figured out that they could make those TV sets a lot cheaper in Mexico and elsewhere around the globe The European and Japanese make more economical cars because the cost of fuel in Europe and Japan is 2-3 times higher than in the U.S. as far as maintainence free, there are no cars made that are maintainence free my friend, but the Japanese are much closer to this than European cars. I have many friends that curse daily at their BMW's and Jags, so much for maintainence free!!! Then again there was that outstanding "maintainence free" European export a few years back that took the world by storm THE YUGO

But that has been the problem in America Vegas Vic

Americans spent money on depreciating consumer goods as if there was no tomorrow

and they used oil resources like there was no tomorrow...........................

it's this failure to be aware of ttrends in the rest of the world that was prevalent

in the U.S. for so long that also lost your innovation skills for things like

TV design and manufacture - not only lower labour costs

With the TV and electronics industry in the states, 90% of the problem was high labor costs and high corporate taxes. I can attest to this first hand! I guess we will find out if the U.S. still has the innovative skills, by what happens in the energy sector and automotive sector over the next 3-5 years! I do agree that the U.S. has taken for granted the low cost of energy, but they had a wake up call when oil hit $1.47/bbl, and now we will see if this generation of Americans can be as innovative, creative and industrious as past generations have been. One thing is for certain and that is the U.S. consumer will not have the easy access to credit anymore, but since most of these "depreciating consumer goods" are no longer produced in the U.S. then I guess that means some serious unemployment numbers will be headed to a country near you soon

[VegasVic]

...................

it's this failure to be aware of ttrends in the rest of the world that was prevalent

in the U.S. for so long that also lost your innovation skills for things like

TV design and manufacture - not only lower labour costs

I think Microsoft did OK.

So did Cisco, Apple, Intel, HP, Google and a host of others! The fact is if Obama has the smarts to engage some wise economic advisors instead of listening to the special intersts of the democratic party, then he will lower the U.S. corporate tax rates and and manufacturing jobs will once again flow back into the states.

[VegasVic]

...................

it's this failure to be aware of ttrends in the rest of the world that was prevalent

in the U.S. for so long that also lost your innovation skills for things like

TV design and manufacture - not only lower labour costs

I think Microsoft did OK.

So did Cisco, Apple, Intel, HP, Google and a host of others! The fact is if Obama has the smarts to engage some wise economic advisors instead of listening to the special intersts of the democratic party, then he will lower the U.S. corporate tax rates and and manufacturing jobs will once again flow back into the states.

I almost forgot to mention nearly the entire pharmacutecal industry

[MJP]

...................

it's this failure to be aware of ttrends in the rest of the world that was prevalent

in the U.S. for so long that also lost your innovation skills for things like

TV design and manufacture - not only lower labour costs

I think Microsoft did OK.

So did Cisco, Apple, Intel, HP, Google and a host of others! The fact is if Obama has the smarts to engage some wise economic advisors instead of listening to the special intersts of the democratic party, then he will lower the U.S. corporate tax rates and and manufacturing jobs will once again flow back into the states.

I almost forgot to mention nearly the entire pharmacutecal industry

Give Britain it's fair dues on pharma VegasVic.

[midas]

...................

it's this failure to be aware of ttrends in the rest of the world that was prevalent

in the U.S. for so long that also lost your innovation skills for things like

TV design and manufacture - not only lower labour costs

I think Microsoft did OK.

So did Cisco, Apple, Intel, HP, Google and a host of others! The fact is if Obama has the smarts to engage some wise economic advisors instead of listening to the special intersts of the democratic party, then he will lower the U.S. corporate tax rates and and manufacturing jobs will once again flow back into the states.

I almost forgot to mention nearly the entire pharmacutecal industry

Give Britain it's fair dues on pharma VegasVic.

Considering the number of Indian doctors in UK and USA

hospitals maybe US will loose the edge on this area as well in due course :-

http://www.pharmaceutical-drug-manufacture...tical-industry/

[Naam]

...................

it's this failure to be aware of ttrends in the rest of the world that was prevalent

in the U.S. for so long that also lost your innovation skills for things like

TV design and manufacture - not only lower labour costs

I think Microsoft did OK.

So did Cisco, Apple, Intel, HP, Google and a host of others! The fact is if Obama has the smarts to engage some wise economic advisors instead of listening to the special intersts of the democratic party, then he will lower the U.S. corporate tax rates and and manufacturing jobs will once again flow back into the states.

Vic, i am very much interested in that stuff you ingest, but i can't help thinking it must be illegal

[maccaroni man]

...................

it's this failure to be aware of ttrends in the rest of the world that was prevalent

in the U.S. for so long that also lost your innovation skills for things like

TV design and manufacture - not only lower labour costs

I think Microsoft did OK.

So did Cisco, Apple, Intel, HP, Google and a host of others! The fact is if Obama has the smarts to engage some wise economic advisors instead of listening to the special intersts of the democratic party, then he will lower the U.S. corporate tax rates and and manufacturing jobs will once again flow back into the states.

It amazes me that no one has said anything about Warren Buffet being so heavily vested in Insurance, IMHO he is with obama to protect and promote insurance, his insurance and no body elses insurance; Warren Buffet is his own lobbiest

[Lopburi99]

I went to work for GM Central Staff in Detroit right out of college in 1970. A year later I went independent then was a supplier (of computer programmers, timesharing services, consultants) for almost 20 years before Ross Perot's Electronic Data Systems (EDS) finally succeeded in forcing me and all other IT related suppliers out (in order to grab every possible GM dollar). I made many, many good friends, most of whom are now also retired. Many are scared shitless now about their financial well-being, or lack thereof. They all thought they had it made in the shade for life, with their stock, dividends, pensions, health care and other benefits.

I remember hearing the phrase before "As GM goes, so goes the country." Tragic and unbelievable.

[kiakaha]

For anyone who doesn't think this is Thai related remember Chevrolet has assembly plant here.

CNN had an interview this morning with a part of Obama's economic team. One of those was the Governor of Michigan. Most of the assmbply plants have been located there for years in Detriot. She talked about the loss of 400K jobs.

I think that is huge understatement, maybe in the assembly plants. But think about what goes into cars. All the nuts, bolts, tires, wheels, wires, connectors, glass, plastic. Those are all produced from Raw mateials not at the assempbly plants but other company's and manufactors a very far reaching list of entities. 400K in job losses is no where near, what the real loss will be. That will hit Thailand hard.

I really don't see that the banks are losing up the purse strings yet, matter of fact read that the Brits a had a little chat with their banks about passing on the savings to the consumer. Seems well over due in the states to me. The American banks seem to be working on the something for nothing theory still.

This is in the real world now, me I don't agree with the government bailing these entities out, not because I don't recognize the importance. But wasn't the idea in bailing out the banks to get them to loan?

Me I think it's time to grab these bankers by the collar drag them into an office and flat tell them. Loan and do it at fair rates. Or your on your own. We will fund banks that loan to help the real economy.

This something for nothing junk is what got us in trouble in the first place.

I do believe that is my second rant this week, time for a chill pill

General Motors Says It May Run Out of Operating Cash This Year

By Jeff Green and Mike Ramsey

Nov. 8 (Bloomberg) -- General Motors Corp., seeking U.S. aid to avoid collapse, said it may not have enough cash to keep operating this year and will be ``significantly short'' by the end of June unless the auto market improves or it adds capital.

Available cash fell to $16.2 billion on Sept. 30 from $21 billion at the end of June, the largest U.S. automaker said yesterday as it reported a $4.2 billion third-quarter operating loss. Merger talks with Chrysler LLC were suspended.

``Things are clearly deteriorating more quickly than people expected,'' said Jill Fields, who manages $2 billion in high- yield debt as managing director at Babson Capital Management LLC in Springfield, Massachusetts. ``They're either going to need aid or they're at risk for filing'' for bankruptcy.

GM's outlook and Ford Motor Co.'s $7.7 billion cash burn added urgency to automakers' pleas for government help after a quarter in which U.S. industrywide sales plunged 18 percent. The companies are asking for $50 billion in new loans, a person familiar with the plan said.

Chief Executive Officer Rick Wagoner, Ford's Alan Mulally and Chrysler's Robert Nardelli renewed the push for assistance in meetings with U.S. House and Senate leaders in Washington on Nov. 6. Wagoner said GM also has been in contact with the staff of President-elect Barack Obama.

``We have sufficient liquidity to continue on plan,'' Mulally, 63, said in an interview with Bloomberg Television. Dearborn, Michigan-based Ford reported an operating loss of $2.98 billion.

Ford rose 4 cents to $2.02 in New York Stock Exchange composite trading, paring the shares' decline this year to 70 percent. Detroit-based GM fell 44 cents, or 9.2 percent, to $4.36. The stock has tumbled 82 percent this year.

$73 Billion in Losses

Yesterday's cash forecast was the bleakest yet from GM, which has lost almost $73 billion since the end of 2004. Using $6.9 billion in cash last quarter pushed GM closer to the $11 billion minimum it says is needed to pay bills.

A bankruptcy filing ``would be a disaster far beyond General Motors and a sad chapter in American history,'' Wagoner, 55, said in a Bloomberg Television interview. GM said on Oct. 24 that bankruptcy ``is not an option.''

Should GM take such a step, the result would be 2.5 million jobs lost in the first year among automakers, suppliers and related businesses, according to a Nov. 4 report by the Center for Automotive Research, based in Ann Arbor, Michigan.

Bailout Optimism

A U.S. rescue package for GM, Ford and Chrysler is likely before President George W. Bush leaves office in January, said Dennis Virag, president of Automotive Consulting Group in Ann Arbor.

``Either the federal government provides money for a bailout and lets the industry retool, restructure, and move ahead, or the industry dies,'' Virag told Bloomberg Television.

Babson Capital's Fields said GM and Ford bonds already are trading at ``bankruptcy levels,'' so the automakers are relying on ``a political decision'' to avert that fate. She wouldn't say whether the holdings she manages include GM or Ford debt.

GM's 8.375 percent bond due in July 2033 fell 4.3 cents to 24 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The debt yields 34.83 percent.

Ford's 7.45 percent note due in July 2031 dropped 3.5 cents to 34 cents on the dollar, yielding 22 percent.

Chrysler Talks

While GM didn't specify any prospective partners in saying merger discussions were being halted, the biggest U.S. automaker had been in negotiations on a tie-up with Auburn Hills, Michigan-based Chrysler, people familiar with the plans said.

Consideration of a strategic acquisition was ``set aside'' to focus on ``immediate liquidity challenges,'' GM said.

GM's per-share operating loss was wider than the average estimate on an adjusted basis of $3.94, based on 10 analysts surveyed by Bloomberg.

Including a non-cash, $4.9 billion one-time gain related to unloading retiree medical bills, GM had a net loss of $2.5 billion, compared with a $38.9 billion year-earlier loss on a tax-accounting charge. GM's auto sales in the U.S., its largest market, fell 21 percent.

GM's cash use in the fourth quarter should be closer to the levels in this year's first and second quarters, when it was about $3.6 billion, Chief Financial Officer Ray Young said on a conference call.

GM said it is trying to boost cash by $20 billion by the end of next year, an increase from a July 15 plan for $15 billion.

Asset sales, a part of the strategy, have been hampered because potential buyers can't get financing, Chief Operating Officer Fritz Henderson said. GM's Hummer brand of sport-utility vehicles is among the businesses on the block.

Ford's Loss

Ford also said it was accelerating savings programs including a 10 percent reduction in salaried-job costs, expanding on a 15 percent slash this year; deeper cuts in production; and a smaller capital-spending budget.

The per-share operating loss of $1.31 was wider than the 93-cent average of 10 analyst estimates compiled by Bloomberg. Revenue plunged 22 percent to $32.1 billion.

The loss for Ford excluded a gain for shedding future retiree medical bills under a new union contract. Including the gain, Ford had a net loss of $129 million, or 6 cents. The net loss a year earlier was $380 million, or 19 cents.

Ford's U.S. auto sales tumbled 25 percent in the quarter.

To contact the reporters on this story: Jeff Green in Detroit at [email protected]; Mike Ramsey in Detroit at [email protected].

Last Updated: November 8, 2008 00:01 EST

If they just cut Tiger Woods' sponsorship fee, they'll be cashed up again

[AlexLah]

Why they need money......

http://money.cnn.com/2008/11/12/news/inter...na.ap/index.htm

[Lopburi99]

I went to work for GM Central Staff in Detroit right out of college in 1970. A year later I went independent then was a supplier (of computer programmers, timesharing services, consultants) for almost 20 years before Ross Perot's Electronic Data Systems (EDS) finally succeeded in forcing me and all other IT related suppliers out (in order to grab every possible GM dollar). I made many, many good friends, most of whom are now also retired. Many are scared shitless now about their financial well-being, or lack thereof. They all thought they had it made in the shade for life, with their stock, dividends, pensions, health care and other benefits.

I remember hearing the phrase before "As GM goes, so goes the country." Tragic and unbelievable.

..But I gotta believe GM's lovely then-chairman Roger B. Smith (now deceased) and Mr. Perot had long ago unloaded most of their GM related assets for their estates, having raped the company, taken their money and run.

Edited November 17, 2008 by Lopburi99

[Alwaysright]

That will hit Thailand hard.

I'd like more details of how Thailand would be impacted. Would GM's operations in Thailand be deemed low-cost enough to escape downsizing?

GM's problem, along with all western companies and governments, is unfunded future pension liabilities. This will make 'sub-prime' look like an old ladies tea dance. I suspect pensions aren't offered to Thai workers so expect more manufacturing facilities to close in the west only to be re-established in the east.

Let them go bankrupt,sink or swim.They have had years to make better cars and didn't.They could then get rid of the useless unions.

[samuibeachcomber]

big business has got govts. by the balls,they're damned if they do and damned if they dont,and this is just the beginning,i think its called blackmail.

[cloudhopper]

I remember hearing the phrase before "As GM goes, so goes the country." Tragic and unbelievable.

IMO GM will go bankrupt regardless of what the government may decide to do, and all your friends' income and equity attributed to GM will be wiped out. GM will not be the last big company to fold. Unemployment will soar and further fuel the credit and price collapse. The government will not be able to fund retirement plan insurance schemes, much less medicare and social security. Or service it's debt. Or make good on FDIC guarantees. ~60% of state budgets are upside down with obvious consequences to services. To tragic and unbelievable I would add criminally negligent and ugly. And it's just beginning.

[midas]

I remember hearing the phrase before "As GM goes, so goes the country." Tragic and unbelievable.

IMO GM will go bankrupt regardless of what the government may decide to do, and all your friends' income and equity attributed to GM will be wiped out. GM will not be the last big company to fold. Unemployment will soar and further fuel the credit and price collapse. The government will not be able to fund retirement plan insurance schemes, much less medicare and social security. Or service it's debt. Or make good on FDIC guarantees. ~60% of state budgets are upside down with obvious consequences to services. To tragic and unbelievable I would add criminally negligent and ugly. And it's just beginning.

yes its easy to forger all these " add on's "

[Lopburi99]

I remember hearing the phrase before "As GM goes, so goes the country." Tragic and unbelievable.

IMO GM will go bankrupt regardless of what the government may decide to do, and all your friends' income and equity attributed to GM will be wiped out. GM will not be the last big company to fold. Unemployment will soar and further fuel the credit and price collapse. The government will not be able to fund retirement plan insurance schemes, much less medicare and social security. Or service it's debt. Or make good on FDIC guarantees. ~60% of state budgets are upside down with obvious consequences to services. To tragic and unbelievable I would add criminally negligent and ugly. And it's just beginning.

yes its easy to forger all these " add on's "

Even in the best of times the labor union related costs were slowly bleeding many large and small (not just the auto industry) companies to death, leaving a void quickly filled by foreign and/or non-union businesses. Now with the economic collapse, the final nail is being driven first into the coffins of many unionized companies. The day of reckoning is here.

One wonders if this could be the beginning of "The Era of America's Great Union Purge"? Unions aren't affordable anymore in many industries, I would argue.

Edited November 17, 2008 by Lopburi99

[henryalleman]

I don't know how the Unions in the US operate but in Europe the Unions are not regarded as the enemy by the companies, but rather as a partner, for their mutual benefits. A small example; the GM plant in Antwerp had to reduce their costs with 50 million Euro, and ask the Unions to participate in finding a solution. Well in 3 days the 50 million was find, without any social conflict.

I will not go on much further on this subject because this isn't the meaning of TV forum, but I only like to emphasize that its not the Unions fault that GM and other US car producers are in the present deplorable situation.

Furthermore I would like to notice that it is GM Detroit who is in financial problems, The economical situation of GM Europe or FORD Köln for the matter is less problematic( and they have very strong Unions, even EU organized). The successful VW company has even the Union Deutsche Metal as a shareholder, and they have one of the highest salaries, redundancy premiums and social protection benefits in Europe.

So blaming the Downfall of US car producers and other industries as an Unions fault is a bridge too far.

No, its not really a bridge too far, but there is plenty of blame to go around! There were plenty of greedy and lazy automotive executives over the past 30-40 years, but it is substantially a problem with arrogance in not changing the product mix quickly enough and of course the out of control union wages, and more importantly retirement and health care benefits (legacy costs) Are you suggesting that its stupid to have a minimum wage? And that health care and retirement provisions are not neccesary? Do you really believe that the survival of the fittest is till the best way to have an prosperous economy? IMHO humans are not tools that you can trow in the garbage bin when not needed anymore. What should happen is that the big 3 should go into chapter 11 reorganization, where sadly the common shareholders will get screwed but also the union retirement benefits can be changed and the healthcare laidoff on the government If the retirement benefits and healthcare was not privatised but organized by the government not any retiree would be affected by it.(this is what Obama wants, so he will get it). The U.S. government will likely do a bailout, with conditions on union pay and benefits as well as ececutive pay and overall compensation. There will also be an increased CAFE standard and a massive retooling effort towards CNG, and hydrogen fuel cell-multifuel vehicles. The changes will take place a warp speed, because quite frankly they have to! On the other hand the Big 3 could just go chapter 7 and dissappear all together and the worldwide recession would then become a worldwide depression Stay tuned in, its just starting to get interesting!

[Lopburi99]

I don't know how the Unions in the US operate but in Europe the Unions are not regarded as the enemy by the companies, but rather as a partner, for their mutual benefits. A small example; the GM plant in Antwerp had to reduce their costs with 50 million Euro, and ask the Unions to participate in finding a solution. Well in 3 days the 50 million was find, without any social conflict.

I will not go on much further on this subject because this isn't the meaning of TV forum, but I only like to emphasize that its not the Unions fault that GM and other US car producers are in the present deplorable situation.

Furthermore I would like to notice that it is GM Detroit who is in financial problems, The economical situation of GM Europe or FORD Köln for the matter is less problematic( and they have very strong Unions, even EU organized). The successful VW company has even the Union Deutsche Metal as a shareholder, and they have one of the highest salaries, redundancy premiums and social protection benefits in Europe.

So blaming the Downfall of US car producers and other industries as an Unions fault is a bridge too far.

No, its not really a bridge too far, but there is plenty of blame to go around! There were plenty of greedy and lazy automotive executives over the past 30-40 years, but it is substantially a problem with arrogance in not changing the product mix quickly enough and of course the out of control union wages, and more importantly retirement and health care benefits (legacy costs) Are you suggesting that its stupid to have a minimum wage? And that health care and retirement provisions are not neccesary? Do you really believe that the survival of the fittest is till the best way to have an prosperous economy? IMHO humans are not tools that you can trow in the garbage bin when not needed anymore. What should happen is that the big 3 should go into chapter 11 reorganization, where sadly the common shareholders will get screwed but also the union retirement benefits can be changed and the healthcare laidoff on the government If the retirement benefits and healthcare was not privatised but organized by the government not any retiree would be affected by it.(this is what Obama wants, so he will get it). The U.S. government will likely do a bailout, with conditions on union pay and benefits as well as ececutive pay and overall compensation. There will also be an increased CAFE standard and a massive retooling effort towards CNG, and hydrogen fuel cell-multifuel vehicles. The changes will take place a warp speed, because quite frankly they have to! On the other hand the Big 3 could just go chapter 7 and dissappear all together and the worldwide recession would then become a worldwide depression Stay tuned in, its just starting to get interesting!

Hello Henry. Vic is far better versed than I on economic matters and it will be interesting to hear his reply. However, since I've lived most of my life in Detroit I'd like to add my viewpoint from that perspective. All of the issues you sited above are certainly needed and important (minimum wages, healthcare, retirement benefits), the problem IMHO is that unionization in the U.S. (often, perhaps usually) quickly surpasses needed, reasonable basic worker protection/benefits, then rapidly over time establishes and propagates inappropriate excess (e.g. $80/hr/auto worker costs as others on TV have cited). As you know, unions are highly political, always promising more and more to the membership, often not hesitating to bring a company to it's knees as a threat. This spiral is what eventually leads to company/product/industry non-competitiveness, job loss/exportation and/or excessive prices. I am extremely interested to see how Obama's team deals with this dilemma. How does he maintain labor union support while simultaneously spurring economic competitiveness for American businesses? By widespread subsidizing? By the "nationalization" of certain benefit programs like you mentioned? Curious to know your ideas of a possible effective yet compassionate economic strategy.

Edited November 18, 2008 by Lopburi99